Aragon Drama Pushes On-Chain Governance Idealists to the Meatspace
Also, taking out a Dai loan with renBTC, Devcon 6 postponed, Polkadot launch.
Hello Defiers, please disregard previous email as it had an incorrect video for the renBTC tutorial embeded. Its’s been corrected here.
Here’s what’s happening in decentralized finance,
Aragon governance drama splits Ethereum community
Celebrating Bitcoin Pizza Day with renBTC
Devcon 6 postponed and to be held in Bogota
Polkadot launches network’s first phase
Foundation is latest to join red-hot tokenized asset space
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On-Chain Idealists Take Legal Dispute to ‘Meatspace’
Aragon was built with the vision of helping spur hundreds of communally owned organizations, governed by token-based votes and computer code. But now that problems with one of its own grant recipients have escalated, it’s turning to plain, old, physical courts.
The story broke when Autark posted this May 22 blog post stating that Aragon “filed a baseless legal action in Switzerland against Autark LLC,” a US company, and that it was seeking to nullify the remainder of the grant they were awarded. Aragon replied with its own post saying it stopped paying out Autark’s grant in January “due to breach of the grant agreement,” as the team hadn’t met agreed-upon goals, and that it filed the lawsuit to claim jurisdiction in Switzerland after Autark threatened to sue in the US. Cofounder Luis Cuende wrote in the post that the former grant recipient is asking for a settlement of $800k.
Still, Aragon wants to move on, Cuende told The Defiant. “We want to close this as soon as possible. It's now on Autark to drop their threats and come to their senses,” he said. “Doors are open.”
Autark CEO Yalda Mousavinia said in a message, “we have a strong legal case against him [Cuende] and the Aragon Association. That’s why he decided to sue us first. And that is the way he decides how to spend the Aragon Association’s money.” She also denied that her company is asking for an $800k settlement.
$2.5M in Grants
Aragon, an open source platform enabling users to create and launch DAOs, raised 275k ETH in a 2017 ICO. It used its treasury in part to fund grants programs such as Flock, which was disbanded in February. Autark, a company building tools to enhance DAO coordination, won two grants, AGP-19 and AGP-73, amounting to roughly $2.5M in funding vested over the course of multiple years.
Autark received half of the first tranche of AGP-73 for $200,000 in November, 2019, with the remaining $200,000 agreed to be distributed in January. It was at this time that Aragon stopped making payments and the dispute began.
Autark said in a blog post Aragon’s breach-of-contract claims are “baseless complaints,” and that Aragon stopped payments before giving them a chance to “cure any alleged defects in performance.”
Cuende said on Twitter his team had tried to solve the problem amicably, but that all they got from Autark was the following answer: “Talk to our lawyers.” Cuende also said in a video posted Tuesday that Aragon isn’t using its own court system because, while “it’s great, it’s not recognized worldwide. This Swiss lawsuit is to protect ourselves so they cannot sue us in a different jurisdiction than where the agreements” were made. Aragon Court doesn’t replace the traditional legal system when there are problems between two legal entities, he said.
Community is Split
The Ethereum community is split between those who support Aragon’s decision to go to the so-called “meatspace” legal system, while others argue the dispute should have been resolved in the project’s own court.
Cuende said in the May 26 video that Aragon Court is meant to resolve onchain disputes such as 51% attacks, meaning that this particular case is not relevant to the Court’s design. Community members have countered this claim, stating that this case is the perfect testing ground for the highly-anticipated product.
Regardless of whether the Court is used or not, we’ve seen a number of responses on both sides of the table. Here are a few worth reading.
Still, this is just a drop in the wider bucket of the vibrant DAO landscape.
If nothing else, it’s fascinating to see the DAO hypothesis playing out live, and cases such as this demonstrating rare edge cases in which community sentiment runs both ways.
[Post was updated with Autark’s response at 12:30pm EST]
How I Celebrated Bitcoin Pizza Day Late (And on DeFi)
May 22nd was the epic 10-year anniversary referred to as Bitcoin Pizza Day. By now, you probably have seen a million pizza emojis and references to the fact that one poor guy spent 10,000 BTC on pizza, and not just once, but supposedly eight times! Do the math: if it's true, he spent 80,000 BTC going back to 2010, equal to about $720 MILLION in USD —if you assume a price of $9,000 for BTC.
I think it's kinda ironic that 10 years later it doesn't feel much easier to spend BTC on pizza and even more ironic, no one spends their BTC! It's been deemed digital gold by the Bitcoin community and Wall St. People buy and hold BTC versus spending it on simple transactions like pizza or coffee. Thankfully we have over $7B in stablecoins on Ethereum that we can increasingly depend on as a medium of exchange.
So what about my BTC?! Well, I can hold it in cold storage or transfer it wallet-to-wallet, but aside from that, I'm pretty much stuck having to use centralized services to open a collateralized loan (ie BlockFi) or use BTC to trade on perpetual markets like the most popular centralized ones at BitMex, Deribit, and Bybit.
I'm DeFi Dad, not CeFi Dad! So this got me wondering, what can I do in DeFi to put my native BTC to use?
A New Day With renBTC
As luck would have it, Ren Protocol came through just yesterday! Ren unveiled the long awaited RenBridge at bridge.renproject.io, where I can swap my BTC for renBTC without any middleman or KYC, just the usual DeFi experience of connecting my Ethereum (and now Bitcoin) wallet while trusting only the Ren smart contracts.
(Btws, please be aware the Ren team does still have a pause function in their control as an emergency precaution. I think it's very pragmatic when launching new smart contracts that could present a risk to newly deposited funds, even if they've been through audits. In the future when this admin right is abstracted away from the control of the Ren team, these smart contracts can then be deemed "trustless.")
Tutorial: How to Swap BTC for renBTC and Open a MakerDAO Loan
I don't have much else to share about this huge moment for DeFi and my first experience today using renBTC because I'd rather show you! Watch the following video as I:
Start with BTC in a Nano Ledger hardware wallet
Swap BTC for renBTC using the RenBridge
Then swap renBTC to WBTC with 1inch.exchange
Lastly, use WBTC to open a leveraged loan in MakerDAO to get Dai
Risks and Cautions Using These DeFi Apps
This is not financial advice and you should approach this new RenBridge with caution. There is always risk in using DeFi apps and protocols, including technical risks (ie smart contracts bugs), financial risks (ie liquidity crises), and admin risk.
You should also be cautious and aware of the following risks: As I called out earlier, there is a pause function in control of the Ren team, meaning they can shut down the Ren network. It's a precaution while these smart contracts are new, but you should be aware of it. If you use 1inch.exchange, renBTC is still very illiquid on Ethereum. You could end up with a terrible exchange rate and/or lots of slippage if trying to swap more than the small amount I demonstrated (ie. $100 of renBTC).
If you use DeFi Saver, you're trusting their smart contracts to open a vault for you, which entails some risk. By opening a vault with MakerDAO, there's risk of liquidation if the price of WBTC drew down to your liquidation price, if you don't maintain a collateralization ratio of 150%. There's also risk of a congested network like what we saw on March 12th when people were having trouble getting through their transactions on the Ethereum network. Please do your own research and never follow this tutorial as financial advice. I'm a DeFi product enthusiast, not a financial advisor.
Devcon 6 Was Postponed to 2021 & Will be Held in Bogota
Ethereum’s annual gathering will be postponed for the first time due to the COVID19 pandemic and held next year in Bogota, Colombia.
The large Argentine Ethereum community had been lobbying for the next Devcon to be held in Buenos Aires for the past several months. The push made the Ethereum Foundation look South and apparently Colombia’s more stable economy and venue options won out.
“Agora [the venue] presented us with an ideally-located and fully modern conference center that is built to handle the catering, WiFi, meeting-space and other needs of an event like Devcon,” the EF’s blog post said.
The EF decided to postpone Devcon rather than organize a virtual event or be subject to last-minute changes in travel and lockdown measures . This year, the plan is to hold “a set of worldwide and independent events this fall.”
First Phase of Polkadot Network Goes Live
After four years of development, the Web3 Foundation on Tuesday launched the first phase of the Polkadot network, a sharded protocol that allows decentralized blockchain networks to operate together.
The current mainnet will operate via a Proof-of-Authority consensus mechanism, in which the Web3 Foundation retains control of the chain, “to execute critical logic and security audits and calibrate final aspects of the network,” Web3 wrote in a blog post. In this phase, holders of Polkadot’s native DOT tokens will be able to claim their tokens and submit their intention to stake, Messari reported. The Web3 Foundation may conduct a “DOT allocation sale to further decentralize the token distribution,” the Web3 Foundation said.
Transak and Wyre partnered to allow residents of most US states and European countries to buy 300+ cryptocurrencies with their debit cards in minutes, without having to go through a centralized exchange or extensive KYC. Easier fiat to crypto on ramps are key to mainstream adoption and this is a good step forward.
Foundation is the latest in a series of projects seeking to provide a marketplace for tokenized assets —these are real-world assets linked to tokens which trade in secondary markets. Tokens provide traceability, allows creators to more directly profit from their work, and fans the chance to support artists, speculate on their success, and simply buy their goods. The first Foundation Market is live at NeueGoods.com.
Crypto Chicks and DAOstack are hosting a virtual hackathon. Here’s the info:
Planet Wide SOS Hackathon -Solutions to Heal the World
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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.